India Power auditor flags Rs 235.11 crore receivables

India Power Corporation Limited reported Rs 235.11 crore of Power Trust receivables and a body-corporate loan at September 30, 2026 that its auditor concluded were not recoverable and should have been provided for. The missing provisions overstated retained earnings and the related financial assets and loans by Rs 235.11 crore.

What did India Power’s auditor flag in the September 2026 results?

India Power’s auditor identified two unprovided exposures in its review of the unaudited consolidated results for the quarter and six months ended September 30, 2026. The Rs 235.11 crore total comprised a Rs 199.70 crore receivable from Power Trust and a Rs 35.41 crore loan to a body corporate, both described as overdue, unsecured and subject to balance confirmation.

The auditor issued an adverse conclusion on the consolidated statement, rather than an audit opinion, because of the two asset matters and the non-recognition of admitted insolvency claims. It said the statement had not been prepared in accordance with Indian Accounting Standards, or Ind AS, and had not made the disclosures required by the listing regulations.

Which India Power assets did the finding affect?

The Rs 199.70 crore Power Trust receivable arose from the sale in previous years of compulsorily convertible preference shares and fully and compulsorily convertible debentures of Hiranmayee Energy Limited. The auditor said the absence of a provision overstated profit before tax and other current financial assets by Rs 199.70 crore at March 31, 2026, and retained earnings and other current financial assets by that amount at September 30, 2026.

The Rs 35.41 crore body-corporate loan represented the full loans balance reported in the September 30, 2026 consolidated balance sheet. The auditor said the missing provision overstated profit before tax and loans by Rs 35.41 crore at March 31, 2026, then overstated retained earnings and loans by the same amount at September 30, 2026.

India Power reported total consolidated assets of Rs 1,926.45 crore at September 30, 2026, compared with Rs 1,857.22 crore at March 31, 2026. The auditor did not state a revised total-assets figure after provisions, but the Rs 235.11 crore finding concerns specified financial assets within the reported total.

Why does India Power dispute the loan provision?

India Power said arbitration proceedings had been initiated for the Rs 35.41 crore loan and that management considered the receivable good pending the arbitration outcome. That assessment differs from the auditor’s conclusion that the overdue, unsecured loan was not recoverable and required a provision at September 30, 2026.

India Power did not state an equivalent explicit recoverability assessment for the Rs 199.70 crore Power Trust receivable. Its note said fair valuation of non-current assets represented by beneficial interest in Power Trust would be carried out at year-end, because interim financial statements for unlisted investments were unavailable; the auditor separately focused on the overdue receivable from Power Trust.

The filing does not provide a scheduled arbitration date, an expected recovery amount or a target date for balance confirmation of the Rs 35.41 crore loan. It also does not provide a collection timetable for the Rs 199.70 crore Power Trust amount, whose major underlying asset was stated by the auditor to be subject to an Insolvency and Bankruptcy Code, or IBC, case.

How does the issue relate to India Power’s insolvency process?

India Power entered the Corporate Insolvency Resolution Process, or CIRP, after the National Company Law Tribunal, Hyderabad Bench, admitted an application on May 15, 2026. The company said an appeal against that order had been filed before the National Company Law Appellate Tribunal and remained pending as of November 13, 2026.

The auditor also cited India Power’s non-recognition of Rs 8,852.99 crore of claims admitted by the interim resolution professional or resolution professional as at September 30, 2026. It said profit before tax was overstated and liabilities understated by that amount, while India Power said necessary provisions or adjustments would be made after the final CIRP outcome.

The Rs 235.11 crore asset issue is separate from the admitted creditor claims, although both matters formed part of the basis for the adverse conclusion. The auditor also identified a material uncertainty over going concern because continuation depends on, among other factors, a viable resolution plan and continued support from financial creditors, operational creditors and customers.

What changed in India Power’s reported balance sheet and cash flow?

India Power’s trade receivables increased to Rs 151.59 crore at September 30, 2026 from Rs 120.01 crore at March 31, 2026, a rise of Rs 31.59 crore. Current assets rose to Rs 557.84 crore from Rs 484.05 crore over the same period, while the separately reported loans balance remained unchanged at Rs 35.41 crore.

Net cash from operating activities was Rs 50.54 crore for the six months ended September 30, 2026, versus Rs 51.19 crore in the corresponding 2025 period. Trade and other receivables used Rs 40.30 crore of working capital in the 2026 half year, compared with Rs 13.44 crore in the prior-year half year.

India Power said it operates in one business segment, generation and distribution of power, so it did not provide segment reporting. It also said the non-regulated business, including wind energy, was transferred to wholly owned IPCL Power Limited with effect from June 28, 2025, and that the resolution professional was reviewing the June 2, 2025 business transfer agreement during CIRP.

Conclusion

The auditor’s conclusion puts Rs 235.11 crore of India Power’s reported assets under direct accounting challenge at September 30, 2026. The larger Rs 199.70 crore Power Trust receivable and the Rs 35.41 crore loan under arbitration were both considered unrecoverable by the auditor, while management maintained that the loan remained good pending arbitration.

Investors should watch the CIRP process, in which expressions of interest were invited on September 2, 2026 and the request for resolution plan was issued to eligible prospective resolution applicants on October 3, 2026. The eventual CIRP outcome, progress in the loan arbitration and any subsequent provision for the two exposures are the disclosed unresolved matters.